{
  "docId": "019dd923-622c-750b-8b97-4517b3b2214e",
  "docSlug": "00da6c52307d",
  "documentTitle": "Sunrun Inc. (RUN)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-07-28 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 8,
  "pageCount": 33,
  "prevPage": 7,
  "nextPage": 9,
  "slideType": "villain_critique",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 1,
  "notes": "The slide uses a quote from a former employee to cast doubt on financial reporting and argues that the business model is economically irrational for customers at the end of the PPA term.",
  "elementsJson": [
    "paragraph",
    "quote_block",
    "bullet_list",
    "footnote"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b97-4517b3b2214e/8",
  "deckHref": "/decks/019dd923-622c-750b-8b97-4517b3b2214e",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b97-4517b3b2214e.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-4517b3b2214e#slide-8",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "We therefore believe the IRS and the investing public should heavily discount and / or totally ignore them.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-e6e9-749a-ba77-acf3f8ab889f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.764,
        "x": 0.118,
        "y": 0.5
      },
      "kind": "list",
      "text": "Once the PPA ends, if the homeowner needs to replace his roof, she could have RUN remove the PV System, but if she wishes for the same PV System to be reinstalled, the homeowner will have to pay those costs.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "4f92c965-0884-4aad-bc30-023e53f8b541",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.764,
        "x": 0.118,
        "y": 0.45
      },
      "kind": "list",
      "text": "If the homeowner needs to replace his roof and it is during the PPA term, he must pay RUN the cost of removing and reinstalling the existing system.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "df08f708-6e4b-4cf1-b6d3-9a3ad8d53a4f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.11,
        "w": 0.764,
        "x": 0.118,
        "y": 0.61
      },
      "kind": "paragraph",
      "text": "Once RUN removes the panels... the homeowner can simply get a new, more efficient, and cheaper system installed with no legacy issues. The relative efficiency of monocrystalline panels improved by 37 percentage points from 2010 to 2020 alone.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "1e060463-f57b-408f-8c76-5545105705d7",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.764,
        "x": 0.118,
        "y": 0.355
      },
      "kind": "paragraph",
      "text": "Asphalt roofs are the most common roof type and typically last 25 years. By the ends of their 20- or 25-year contracts, customers will be at the point of needing to replace their roofs.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "4fcee34c-c2d8-48a1-9d64-01b9b0a766bd",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.055,
        "w": 0.764,
        "x": 0.118,
        "y": 0.255
      },
      "kind": "paragraph",
      "text": "The former finance employee is saying that RUN's renewal values fall into the category of highly speculative revenue with respect to aging and obsolete PV Systems.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5e6b0ac8-d51c-4f46-835f-86c40e393d17",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.115,
        "w": 0.764,
        "x": 0.118,
        "y": 0.132
      },
      "kind": "quote",
      "text": "Now the in terms of the non-GAAP metrics like Subscriber Value... those numbers are completely, I wouldn't say they're made-up numbers, but there's no validation... You should be highly skeptical.",
      "attrs": null,
      "subkind": "pull-quote",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "cdc48370-a274-4708-a221-21b03a631833",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "\"Now the in terms of the non-GAAP metrics like Subscriber Value that are used to basically explain to the Street and to investors, what are the underlying economics at a customer level... those numbers are completely, I wouldn't say they're made-up numbers, but there's no validation... You should be highly skeptical.\" — Former RUN Executive A",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd952-e6e9-749a-ba77-b3fcb2f653ce",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.764,
        "x": 0.118,
        "y": 0.85
      },
      "kind": "source-note",
      "text": "14 Interview with Former RUN Executive A, October 2021\n15 Evaluating Cost Basis for Solar PV Properties (treasury.gov)\n16 https://money.usnews.com/money/personal-finance/family-finance/articles/how-long-can-you-expect-your-roof-or-fridge-to-last",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "732548fa-3d05-4394-a0dd-af56b021246f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.35,
        "x": 0.118,
        "y": 0.58
      },
      "kind": "title",
      "text": "Factors that Affect Renewal Rate: Obsolescence",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "856b3168-f876-48fa-b6a0-253544abebab",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.35,
        "x": 0.118,
        "y": 0.325
      },
      "kind": "title",
      "text": "Factors that Affect Renewal Rate: Roof Condition",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ba4d6b36-21f4-4cb2-a704-52ea34a3097d",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Villain slide",
      "slug": "villain-slide",
      "agent": null,
      "layer": "slide",
      "matchId": "57696f6c-9a22-48f2-9b4c-198ec408bdca",
      "evidence": "The slide presents a critical view of RUN's business practices, highlighting potential issues with their financial reporting and contractual obligations.",
      "confidence": 0.9
    }
  ],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 20,
      "from": 6,
      "beatId": "cf489be1-5d4b-47b0-b96c-139ebc5df28c",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "The Struggle",
      "beatSlug": "overcoming-monster-the-struggle",
      "evidence": "RUN's business practices and financial modeling are critiqued in detail.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [
    {
      "to": 10,
      "from": 5,
      "name": "Pattern Hunter",
      "slug": "02-pattern-hunter",
      "bestFor": "Time-pressed audiences, building consensus, when data is strong",
      "matchId": "4ad1a934-cbc4-4d42-9b70-a03c6c296293",
      "evidence": "The document presents a series of contradictions in RUN's financial modeling.",
      "position": 0,
      "objective": "Why RUN's financial modeling is flawed",
      "structure": "Evidence A -> Evidence B -> Evidence C -> Pattern/Conclusion",
      "confidence": 0.7,
      "description": "Group multiple pieces of evidence that together point to a pattern or conclusion"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}